This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Chill H&R Block Bulls: Taxes Unlikely to Get Simple

NEW YORK ( TheStreet) -- President Obama's advisers may be borrowing a plan from defeated Republican challenger Mitt Romney to simplify the tax code, but chances are it will remain tricky enough to allow H&R Block (HRB - Get Report) to keep revenues climbing, according to an analyst report published Tuesday.

BTIG analyst Mark Palmer writes that "some clients have expressed concern" about "the possibility that the U.S. government will embark on a new program of tax simplification that would obviate much of the need for tax preparation assistance."

However, Palmer doubts any such effort will succeed.

"The benefits of tax simplification have been touted by Democrats and Republicans alike for the past 50 years," he writes.

Opponents of a simplified tax code include "tax lawyers, accountants, investment advisors specializing in tax shelters, IRS agents, publishers and others in peripheral businesses," whose livelihood depends on its complexity, Palmer contends. He believes "these groups have their own small armies of lobbyists and significant sway over the legislative process."

Another consideration for H&R Block investors is what would happen if the U.S. goes over the "fiscal cliff," following a failure by Congress to agree on a plan to reduce the U.S. deficit.

Falling off the cliff would create confusion, leading to an opportunity for H&R Block to win new clients, according to Palmer.

"Confusion over taxes, such as that potentially created by the fiscal cliff, is the mother's milk of the assisted tax preparation industry, and the complexity of this year's situation could give H&R Block an edge,' he writes.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
HRB $31.23 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%


DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs